Telstra to axe jobs in major shake-up

Significant job losses are expected at Telstra after the telco announced sweeping changes to structure.

22 May 2013Peter Cai

Jobs to go: Telstra. Photo: Glenn Hunt

Significant job losses are expected at Telstra after the telco announced sweeping changes to its operational structure as it shifts away from its legacy business.

The telco plans to divert its resources towards high-growth areas such as wireless, NBN and network services while cutting back on loss-making ventures, such as the Sensis directory business.

About half of Telstra's 30,000-strong domestic workforce will be affected by the changes, which will be introduced between now and July 1, when the new structure goes live.

The company's chief operation officer, Brendon Riley, described the move as the ''most substantive changes for 10 years''.

Mr Riley said Telstra would continue to drive improvements and efficiencies in core business and allocate more resources to growth businesses, such as network application services and cloud data storage.

''Our traditional businesses are coming under increasing margin pressure and the largest portion of our budget is spent supporting them. This is not a sustainable business model and we have an obligation to redefine our contributions to Telstra,'' Mr Riley said in an announcement of the changes to staff on Wednesday.

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Telstra's legacy businesses such as the Yellow Pages directory, which was once a cash cow, have been under pressure in recent years as people turned to internet search engines. The company slashed 648 jobs from Sensis in February.

The so-called rivers of gold that once flowed from Telstra's monopoly hold over the copper wire network is expected to ease as the rollout of the national broadband network gathers pace across the country.

The overhaul is expected to produce a cut in Telstra's headcount in Australia as it simultaneously expands overseas, and in Asia in particular. The company refused to comment specifically on the number of job losses.

''I anticipate that we will be creating efficiencies which will mean we have jobs that will go in certain areas, but on the other hand there is investment in jobs creation that we need to do,'' Mr Riley said. But he admitted the job number was likely to be down overall.

Community and Public Sector Union national president Michael Tull said: ''We will oppose any offshoring of roles - as is happening in Sensis - and we'll work hard to ensure workers are given greater job security and career opportunities in any future Telstra.''

Telstra has already cut 2500 jobs over the past year. At the end of December the telco had a total workforce of 38,663.

Telstra would reorganise its operations into five groups, Mr Riley said, and three of them - IT Solutions, Networks, and Customer Service Delivery - would be new. Two existing operational units, one covering the company's work with and for the national broadband network and Telstra's new growth engine - Network Applications and Services, which manages data for business customers - would be retained.

Underlying support functions will be common to all five groups, and Mr Riley said the groups would be responsible for ''end-to-end delivery of services to our customers''.

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